MUSCAT: Oman’s commercial banks have achieved a robust 10.04 per cent growth in total credit at OMR18.17 billion for the first nine months of 2015 from OMR16.51 billion for the same period of last year, according to the Central Bank of Oman.
The incremental credit growth of all banks in absolute terms was OMR1,657.6 million in a year, which is more or less in line with the loan growth seen last year and was mostly driven by both corporate and retails segments.
The demand for credit from the corporate sector is mostly for funding projects, which are either state-owned entities like Oman Oil Refineries and Petroleum Industries Company (Orpic) or semi-government firms. Orpic is implementing three major capital intensive projects — Sohar Refinery expansion, Liwa Plastics Project and a 230 km-long pipeline between Muscat and Sohar. Major real estate projects are also driving demand for credit.
Hamoud Sangour Al Zadjali, executive president of Central Bank of Oman (CBO) earlier said that the credit growth for the whole year would be in double digits and would probably hover around 10 per cent.
The pipeline of credit is still strong, which will continue for another two more quarters since local banks are also actively participating in syndicated loan facilities for project funding.
Total deposits of Omani banks also rose by 6 per cent for the first three quarters of 2015 at OMR18.14 billion, from OMR17.11 billion for the same period last year, according to monthly statistics released by the apex bank. Deposit mobilisation of banks is showing a deceleration, partly due to the recent debt issues of government and corporate sector.
Because of continued slackness in oil prices, the banks will be more conservative in lending in the second half and focus more on the credit quality rather than quantity.
The recent sukuk issue and development bond issues of the government also absorbed sizable liquidity of banking system to the extent of OMR250 million. Oman has seven conventional banks — Bank Muscat, National Bank of Oman, BankDhofar, HSBC Bank Oman, Bank Sohar, Oman Arab Bank and ahlibank.
Total assets of commercial banks by end-September 2015 touched OMR27.95 billion, showing a growth of 13.59 per cent over the same period last year.
